Principal Issues: (1) Would subsection 70(6) of the Act apply to a property where the property is used to secure a loan and only the proceeds of the loan, not the mortgaged property, is transferred to a spouse trust. (2) Would 70(6) of the Act apply where mechanisms are put in place to either have the estate or the surviving spouse assume the "non-qualifying debts" in order to circumvent the application of subsection 70(7) of the Act. (3) Can the executors use property that entered the estate after the individual passed away to make the election under subsection 70(7) of the Act.
Position: (1) and (2) Question of facts - maybe no transfer of property or income being paid out to a third party. The submitted scenarios might result in the replacement of a testamentary debt by a non-testamentary debt, thereby making subsection 70(7) of the Act inapplicable. (3) Taxpayer has submitted this question to the Department of Finance.
Principal Issues: Spin-off of the shares of a subsidiary of a public corporation ("Parent") by way of a reduction of paid-up capital of the parent's shares. Whether subsection 84(4.1) applies or subsection 84(2).
Principal Issues:
1. What are the tax implications of taking a mortgage out of an RRSP?
2. Can the annuitant of the RRSP claim the mortgage administration fees personally?
3. Will ATR-24 apply in these circumstances?
4. Can the annuitant claim the legal fees incurred on behalf of the RRSP in a lawsuit regarding damages claimed by the RRSP?
Position:
1. Outlined possible tax consequences and noted we do not provide opinions or rule on the valuation or propriety of such transactions.
2. No, the expenses are expenses of the RRSP.
3. Question of fact
4. No
Reasons:
Explained options available to the RRSP and annuitant in these circumstances.
Principal Issues: Are corporate partners able to claim the deduction under subsection 112(1) of the Act in respect of dividends allocated from a partnership?
Principal Issues: Addition to the adjusted cost base of remaining shares owned by an individual where paragraph 40(3.6)(a) applies to deny the loss on a redemption of such shares and the deemed dividend under 84(3) was subject to a subsection 83(2) election.
Position: No addition to the adjusted cost base under paragraph 40(3.6)(b) in this situation because the loss, as otherwise determined is deemed by subsection 112(3) to be nil as well. This result is based on the assumption that no taxable dividends have been received by the individual on the shares.
Principal Issues: Whether benefits received by a blind employee for spousal travel, is taxable when the spouse performs the functions of a travel guide that is normally provided to enable the employee to travel and assist him or her in performing the duties of employment.
Position: Yes, provided that the spouse is travelling solely to perform the functions of an attendant who is required to enable the employee to travel and provide assistance to the employee in the performance of other duties of employment during the trip.
Principal Issues: Whether mutual fund salesperson could report their commissions through their corporation
Position: Question of fact.
Reasons: It must be determined whether the individual or the corporation is carrying on business. If the individual is legally precluded from operating through a corporation, then he or she must report the commissions personally.
Principal Issues:
1. Whether paragraph 13(7)(e) of the Act applies to a disposition of property from a US sister company to a Canadian sister company.
2. Whether the half-year rule exception in subsection 1100(2.2) of the Regulations applies to the Canadian company when they acquire the property from the US company.
Position: 1. Question of fact.
2. Question of fact.
Reasons:
1. Paragraph 13(7)(e) of the Act only applies where the property acquired by the Canadian company is "capital property of the transferor".
2. The property is generally not "depreciable property" of the transferor, by virtue of subsection 1102(3) of the Regulations, such that the requirements in paragraph 1100(2.2)(f) of the Regulations are not satisfied and the exception to the half-year rule does not apply.
Principal Issues: At what point in time is an amount added to the CDA, when a taxpayer elects under subsection 14(1.01) of the Act to treat the actual disposition of an ECP as a deemed disposition of capital property?
Position: No amount can be added to the CDA until the taxpayer files its election under subsection 14(1.01) of the Act with its return of income for the year.
Reasons: The property disposed of is still considered an eligible capital property until the taxpayer files its election under subsection 14(1.01) of the Act with its return of income for the year.
Principal Issues: (a) Is sales tax included in the value of a taxable benefit received by an employee with respect to an employer-paid group term life insurance policy? (b) Is the taxable status of an employee-pay-all wage loss replacement plan affected when the employer pays the sales tax on the premium?
Position: (a) Yes. (b) No.
Reasons: (a) Part XXVII of the Regulations (b) IT-428
Principal Issues:
Can a taxpayer claim the tuition tax credit
1. for courses taken through a foreign university via the internet
2. for courses taken from a Canadian subsidiary of a foreign university that is registered and complies with provincial legislation via the internet ?
3. Can the taxpayer claim the education credit
Position:
1. No
2. Yes,
3. Yes
Reasons:
1. 118.5(1)(b) requires full-time attendance at a university outside Canada
2. 118.5(1)(a) applies - only needs to be enrolled
3. 118.6(2)
2003-003688
XXXXXXXXXX C. Tremblay, CMA
957-2139
September 15, 2003
Principal Issues: (1) Would subsection 70(6) of the Act apply to a property where the property is used to secure a loan and only the proceeds of the loan, not the mortgaged property, is transferred to a spouse trust. (2) Would 70(6) of the Act apply where mechanisms are put in place to either have the estate or the surviving spouse assume the "non-qualifying debts" in order to circumvent the application of subsection 70(7) of the Act. (3) Can the executors use property that entered the estate after the individual passed away to make the election under subsection 70(7) of the Act.
Position: (1) and (2) Question of facts - maybe no transfer of property or income being paid out to a third party. The submitted scenarios might result in the replacement of a testamentary debt by a non-testamentary debt, thereby making subsection 70(7) of the Act inapplicable. (3) Taxpayer has submitted this question to the Department of Finance.
Submitted by narmstrong on Mon, 10/23/2023 - 17:43
trustee exercise of discretion to distribute trust capital rather than interest income to resident beneficiary was to be respected, and such distribution was not of a taxable capital gain
The corporate trustee of a non-resident trust, which under the trust terms was accorded the discretion to distribute trust capital or income to...
The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.
Principal Issues: Can the distributions from a trust to a beneficiary who is both an income and capital beneficiary be considered to be a distribution of income to the extent of the trust's income for the year?
Position: The trustee of a discretionary trust can normally choose to make a payment from the income or capital of the trust to the extent of the trust's income and capital at the time of the distribution.
Reasons: In the case under review, there appears to be sufficient capital available to be distributed to the beneficiary in accordance with the terms of the trust deed and the minutes of the trustee's decisions.
